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17.5.3.1 FDCPA’s Coverage of Litigation Practices

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  6. 17.5.3.1 FDCPA’s Coverage of Litigation Practices

17.5.3.1 FDCPA’s Coverage of Litigation Practices

A wide range of state court collection activity is subject to the FDCPA. The Supreme Court in Heintz v. Jenkins confirmed that normal collection litigation is included among the collection activities regulated by the FDCPA.163 Congress itself has since implicitly reaffirmed that principle twice by amending the FDCPA to exempt “a formal pleading” made in a “legal” or “civil action” from certain disclosure requirements.164 These exceptions would be meaningless if inclusion of collection litigation were not already the rule.

Which parties are subject to the FDCPA raises another issue. The FDCPA does not apply to the originating creditor suing under its own name.165 On the other hand, the FDCPA applies to the collector’s collection attorney, so long as the attorney is collecting consumer debts as part of the attorney’s “regular” business activities.166 And it certainly applies to a collection agency that is bringing the action on behalf of another.167

A debt buyer’s liability under the FDCPA is more complicated. There are two main grounds for finding FDCPA coverage: when there is regular collection of debts owed to another and when a business’ principal purpose is the collection of any debts.

The Supreme Court ruled in 2017 that a debt buyer does not fall within the definition of a party collecting a debt owed to another, as long as the debt buyer presently owns the debt.168 Even if a debt buyer does not fall within that prong of the FDCPA definition of a covered party, the FDCPA still applies to a party whose principal business is the collection of debts. A debt buyer typically should fall under this definition.169

A small minority of states recognize a litigation privilege or immunity that bars tort170 or statutory171 remedies to redress collection litigation abuse or misconduct. Nevertheless, no litigation privilege or immunity applies under the FDCPA to collection litigation misconduct.172 Accordingly, FDCPA claims are always available to redress any qualifying litigation misconduct, whether brought as an affirmative suit in state or federal court or as a counterclaim in the collection action.

The FDCPA exempts process servers, but such servers can still be subject to the FDCPA if they produce false affidavits indicating that they served process. Process servers are exempt only when they serve process.173

Footnotes

  • 163 Heintz v. Jenkins, 514 U.S. 291, 115 S. Ct. 1489, 131 L. Ed. 2d 395 (1995).

  • 164 15 U.S.C. §§ 1692e(11), 1692g(d).

  • 165 15 U.S.C. § 1692a(6)(F)(ii).

  • 166 15 U.S.C. § 1692a(6). See also National Consumer Law Center, Fair Debt Collection § 4.2.8 (9th ed. 2018), updated at www.nclc.org/library.

  • 167 15 U.S.C. § 1692a(6). See also National Consumer Law Center, Fair Debt Collection § 4.2.8 (9th ed. 2018), updated at www.nclc.org/library.

  • 168 Henson v. Santander Consumer USA, Inc., ___ U.S. ___, 137 S. Ct. 1718, 198 L. Ed. 2d 177 (2017).

  • 169 See National Consumer Law Center, Fair Debt Collection § 4.2.4 (9th ed. 2018), updated at www.nclc.org/library.

  • 170 See National Consumer Law Center, Fair Debt Collection § 15.1.3 (9th ed. 2018), updated at www.nclc.org/library.

  • 171 See National Consumer Law Center, Fair Debt Collection (9th ed. 2018), updated at www.nclc.org/library.

  • 172 Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4th Cir. 2007); Todd v. Weltman, Weinberg, Reis & Co., 434 F.3d 432 (6th Cir. 2006). See National Consumer Law Center, Fair Debt Collection § 12.5.6 (9th ed. 2018), updated at www.nclc.org/library.

  • 173 See Sykes v. Mel S. Harris & Assocs., L.L.C., 285 F.R.D. 279 (S.D.N.Y. 2012), aff’d on other grounds, 780 F.3d 70 (2d Cir. 2015).